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Satyam loses appeal in Upaid case

LONDON: Satyam Computer Services has lost an appeal at the Court of Appeal here which upheld a previous High Court order, barring the Indian IT firm’s moves to block the online mobile payment company Upaid’s fraud and forgery claims against it in Texas, U.S.

The ruling allows Upaid’s lawsuit against Satyam alleging misrepresentation, forgery, fraud and breach of contract to proceed for a U.S. trial by jury in Texas Federal Court, Upaid Systems on Wednesday said in a statement, adding, Satyam too has admitted that “extremely large sums of money,” are involved in the case.

Upaid had originally filed a lawsuit in April 2007, following the revelation in Texas of forged documents being previously provided by Satyam to Upaid.

Against this, Satyam had sought a High Court injunction in London on September 2007 to try and block the Texas case, arguing that a 2003 commercial agreement terminating the relationship between the two firms precluded all future claims against it for all past practices and that any residual claims against it had to be tried in London.

However, the High Court categorically refused Satyam’s request in January. After testimony from senior executives of both firms and legal experts, the court ruled that the Texas claims could proceed. Satyam, then appealed against the decision which was again dismissed last Friday by the Court of Appeal in London. — PTI

Saye Sekhar writes from Hyderabad

IT major to contest

Satyam Computer Services Chief Financial Officer Srinivas Vadlamani said: “We are confident that we will be able to defend our case in the Texas court in the U.S. when the matter is taken up in 2009.”

Responding to a question on how would the decision of the London court impact Satyam, Mr. Vadlamani said the London court’s verdict only decided the jurisdiction, but not the actual case.

Asked if how much money was involved, he said that claims of damages were not taken up by the London court. The issue would be taken up by Texas court.

The Courts in London have decided that the case in Texas can continue and be heard based on an earlier assignment agreement signed by Satyam’s then subsidiary and Upaid.

Thus, the current decision in the U.K. court has determined the jurisdiction lies in the U.S. and the underlying case is expected to be tried in the U.S. in 2009.

The U.S. case is in a very preliminary stage and has to undergo the due process of law and Satyam is confident that it has merits in this case and would contest the case.

It is premature to make any judgment on the quantification of any potential damages and also the matter is sub-judice. Satyam is considering its legal options as regards the dismissed appeal in the London courts.

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